Archive for November 2013

They say the prices are cyclical, like they are for all vegetables. They say India grows enough vegetables to provide for our growing population and we have enough surplus to export. Well, if that’s so, then why does a kilo of tomatoes today cost fifty rupees? A few phone calls and visits to local grocery shops (not the supermarkets) confirmed that today, in Bangalore, Mumbai and New Delhi, tomatoes sold for Rs 45 to Rs 55 a kilo.

Sauce and ketchup every which way you look in sizes from 90 grams to 1 kg – that’s where India’s tomatoes are going.

The chart above illustrates the price of a kilo of tomatoes in India’s urban centres between the first week of July 2010 and the third week of October 2013 – tomato prices have been recorded for 59 urban centres over 173 weeks. To simplify what is otherwise a maniacal tangle of individual threads (see chart below) I have taken a median price, and urban price at the 80th and 20th percentiles, which together describe the overall movement and variation well enough. The cycles are indeed visible – they are roughly 40 weeks long.

Tomato prices recorded for 59 urban centres over 173 weeks.

But the cycle changed from the first week of April 2013, when the prices of a kilo of tomato rose more steeply than before. And from the first week of August 2013, tomato prices have settled at a new plateau significantly higher than at any time in the last three years.

Why has this happened? The growth of the processed foods industry is the main cause – this industry sector has for the last three years grown (in value) at around 15% per year, which is greater than the GDP ‘growth’ and greater than the growth in value recorded for agriculture in general. For tomatoes, this means that every quarter, more tomatoes exit the stream of tomatoes that would otherwise go to home kitchens and instead enter factories, there to be turned into sauce, ketchup, purée and powder (which you find as flavouring even in those awful noodle ‘tastemaker’ sachets and cup noodle containers). These thousands of tons will become available as packaged and processed goods (the better to accompany the acres of super-fattening industrial pizza being baked every day) and this means less, per capita or per household, is available as primary produce that can be used in kitchens at home.

“Those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the ‘exploited’ but the outcast, the ‘leftovers’.” – Pope Francis. Image: L’Osservatore Romano

Pope Francis has issued, a month before Christmas, a blunt and plain message to the political and financial masters of our societies. That message is: the economics of exclusion and inequality must stop.

Francis has begun this section with: “It is not the task of the Pope to offer a detailed and complete analysis of contemporary reality, but I do exhort all the communities to an ‘ever watchful scrutiny of the signs of the times’. This is in fact a grave responsibility, since certain present realities, unless effectively dealt with, are capable of setting off processes of dehumanisation which would then be hard to reverse.”

He gives a nod to the proponents of technological remedies to many of our contemporary problems: “We can only praise the steps being taken to improve people’s welfare in areas such as health care, education and communications.” And then gets to the root of the issue with “at the same time we have to remember that the majority of our contemporaries are barely living from day to day, with dire consequences. A number of diseases are spreading. The hearts of many people are gripped by fear and desperation, even in the so-called rich countries. The joy of living frequently fades, lack of respect for others and violence are on the rise, and inequality is increasingly evident”.

“It is a struggle to live and, often, to live with precious little dignity. This epochal change has been set in motion by the enormous qualitative, quantitative, rapid and cumulative advances occurring in the sciences and in technology, and by their instant application in different areas of nature and of life. We are in an age of knowledge and information, which has led to new and often anonymous kinds of power.” This is a complaint as plain as any we have seen from those suffering from the effects of climate change, from the forced economics of austerity, from the land grabs and the perversions of democracy. It is possible that in the last sentence, Francis has also warned against the global spying (by the USA and its feckless allies) which included the Vatican too.

In the sub-section titled ‘No to an economy of exclusion’ Francis has made plain his opposition [get the English pdf here] to the current systems of power and control:
“Just as the commandment ‘Thou shalt not kill’ sets a clear limit in order to safeguard the value of human life, today we also have to say ‘thou shalt not’ to an economy of exclusion and inequality. Such an economy kills.”
“How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality. Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalised: without work, without possibilities, without any means of escape.”

“Human beings are themselves considered consumer goods to be used and then discarded. We have created a ‘throw away’ culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the ‘exploited’ but the outcast, the ‘leftovers’.”

And in one angry paragraph, Francis effectively sends packing the army of macro-economists and financial manipulators who continue to claim that constant growth (GDP, economy, consuming, and so on) brings people out of poverty thanks to the ‘free market’.

“In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralised workings of the prevailing economic system. Meanwhile, the excluded are still waiting.”
“To sustain a lifestyle which excludes others, or to sustain enthusiasm for that selfish ideal, a globalisation of indifference has developed. Almost without being aware of it, we end up being incapable of feeling compassion at the outcry of the poor, weeping for other people’s pain, and feeling a need to help them, as though all this were someone else’s responsibility and not our own. The culture of prosperity deadens us; we are thrilled if the market offers us something new to purchase. In the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us.”

This is indeed revolutionary material from the Vatican. Now let’s see what effect it has on the suits in the G20, the banking parasites, the stock marketeers, the land grabbers, the ecological criminals in all our countries.

They have no faith, no shame and are inhuman in intent though not in form. They are the so-called ‘negotiators’ at the 19th session of the UNFCCC’s Conference of the Parties (COP19), and they are the hundreds of representatives of industry and businesses from all over the world, and the hundreds of palm-greasers, bare-faced liars, scoundrels and ecological criminals that have defied description from the very first COP. We peoples of the South had no hand in the appointment of these ‘negotiators’ and we have no means to halt the infestation of such Conferences of Parties by the worst ecological criminals of any age. Yet they are gathered together at the so-called ‘climate talks’ now concluding in the Polish capital of Warsaw.

The Transnational Institute’s excellent visual expose of the lobby groups that block and distort attempts to address climate change.

Poland’s current comprador government has accumulated a reputation for being pro-coal and dismissive of the evidence and impacts of climate change. anti-climate stance. Poland’s current comprador government, together with others from the European Union, has blocked efforts in the EU to bring in more sensible climate and energy policy (including increasing energy efficiency, renewables and emission reductions targets) and instead for pushing for the exploitation of shale gas and so called ‘clean coal’ – a misnomer as horrid as ‘clean nuclear’.

But this COP – number 19 in a ramshackle and expensive series that has for the last few years been traitorous to the hundreds of millions in the South who suffer daily the impacts of climate change – is a startling new low amongst a litany for COPs that have plumbed new lows recently. COP19 is the first United Nations climate talks to have corporate sponsorship, with some of the biggest ecological criminals and outright climate crooks as official ‘partners’, such as the steel company ArcelorMittal, the electricity and energy company Alstom and the automobile company BMW which panders to the most depraved consumer tastes.

Why have we not seen the application of moral courage by UN Secretary-General Ban Ki-Moon, UNDP head Helen Clark, UNEP head Achim Steiner, UNICEF head Anthony Lake to prevent this hijack of a UN process? Because such censure has not issued from UN agency heads, the World Coal Association has in parallel with COP19 organised an International Coal and Climate Summit, whose joint ‘Warsaw Communiqué’ is an outrageously blunt call for more coal and false ‘solutions’ such as carbon capture and storage. Worse, this lies and deceit has been wrapped in the language of sustainable development (‘green economy’ repeated in the 190 languages of the UN system).

The fundamental weakness of the UNFCCC structure and approach is that it will not address the social-systemic contradictions generated by the power structure of today’s monopoly-finance capital – and this is because the ‘negotiators’ are the peoples’ representatives, the discussants have nothing whatsoever to do with community but are the agents of finance capital and extractive industry and the merchants of consumer doom. The UNFCCC has utterly and fatally lost sight of the changes to be considered in the context of a planetary emergency which cannot be confined within the narrow channels that the ruling class and its political power elite will accept.

The ‘deal’ that will be announced at the closing of COP 19 – like the previous few COPs – will make not even the slightest shift away from mere discussions of energy, efficiency, and technology, to the deeper questions of social needs and purposes, and the rational utilisation of resources in a manner that respects Nature and our Earth.

These rogues and ecological criminals must perforce be told the ancient myth of King Midas, whose wish was granted by the god Bacchus. The branch, the stream, his food – all turned to gold and thus the foolish king found himself, too late, a corporal being with no relation to Nature, on which his existence depended. This realisation caused the remorseful Midas to plead with Bacchus to be freed of this catastrophic ‘gift’. When Bacchus relented and restored to Midas his normal, human self and freed him of the ‘gift’, Midas devoted the remainder of his life to the worship of Pan, the god of Nature.

The ‘negotiators’, the representatives of the agribusiness, metals, fossil fuels, automobiles, electronics and other industries, the many lobbies working for this scheming lot, the fanged bankers and financiers and their servant economists, and the politicians all teeming at COP 19 are a collective Midas the Earth groans under. Only when they see for themselves the profound error of pursuing commodified wealth at the expense of both humanity and Nature will this deadly charade conclude.

The recently-held Biofach India 2013 in Bengaluru – which is an annual meeting about and exhibition of organic producers and products – has helped confirm three disturbing trends concerning Indian organic produce.

These are:(1) that the urban market for organic products is growing at a rapid pace and a ‘junior’ food retail system (junior as compared with established, large-scale food retail as a consumer goods sub-sector) devoted to these products is aggressively rounding up consumer interest and budgets;(2) that under central government programmes to encourage and promote cultivation based on organic principles (like the Rashtriya Jaivik Kheti Pariyojana, or National Project on Organic Farming) state governments have administrative and budget capacities (even though small) to develop organic produce but these efforts are evolving into parallel, local-specific knowledge and practice networks; [update in response to the valuable comment below: the networks coming about is a good thing for the long term, but there is apparently less and less connection between the produce from these networks (if there is a surplus townspeople can buy) and the retail frontrunners in the organic foods business. If this separation continues along this path, organic foods and beverages will be an upper middle class consumable that bears no relation with the human-scale cultivation these networks locally are fostering.] (3) that the connection between the organic farming family in the rural district and the consumer is being exploited in a sophisticated manner by a growing roster of new companies whose profit margins do not lead to higher or necessarily more secure incomes for the cultivating household. [Read the full article at Infochange India.]

A simple poster in Kannada about organic farming methods

The real destiny of most organic foods grown in India, processed and packaged by *Indian organic food traders (under third-party certification), and promoted abroad (particularly in Europe and North America) is as exports. The Agricultural and Processed Food Products Export Development Authority (APEDA), which is responsible for promoting food exports, said that India exported almost 70,000 tons of organic products, valued at around US$ 130 million (around Rs 715 crore) in 2010-11. This rose to 115,000 tons worth over US$ 360 million (around Rs 2,090 crore) for 2011-12. An APEDA statement quoted in the business press attributed the financial assistance it has given the organic foods export sector (about Rs 210 crore) as being responsible for this growth. Furthermore, APEDA has forecast that exports of organic foods and beverages from India could double by 2014.

This quarter, that is October to December 2013, a number of India’s cities will cross population landmarks. The 2011 Census fixed the country’s urban population at just over 311 million, a population that had grown over ten years by 31.8% (compared with the rural population growth of 12.3%).

What this means is that India’s cities and towns are adding to their numbers every year and every month at roughly the decadal rate seen for 2001-11. Each urban centre has recorded its own rate of population growth but all together, the rate of growth in the populations of India’s urban settlements has raised the number of Class I towns (those with a population of 100,000 and more) to 490 – the category had 394 in 2001!

So, for the last quarter of 2013, here are the new population marks that will be crossed:
* Tiruppur in Tamil Nadu (1,033,000), Aligarh in Uttar Pradesh (1,002,000), Bareilly in Uttar Pradesh (1,065,000), Mysore in Karnataka (1,047,000) and Guwahati in Assam (1,018,000) will all cross the million mark.

And moreover:
* Muzaffarabad in Uttar Pradesh (527,000), Kurnool in Andhra Pradesh (531,000), Vellore in Tamil Nadu (515,000), Udaipur in Rajasthan (504,000) and Tirunelveli in Tamil Nadu will cross the 0.5 million population mark.
* Nellore in Andhra Pradesh (627,000), Malegaon in Maharashtra (614,000) and Durgapur in West Bengal (610,000) will cross the 0.6 million population mark.
* Puducherry (union territory, 708,000), Guntur in Andhra Pradesh (733,000) and Gorakhpur in Uttar Pradesh (714,000) will cross the 0.7 million population mark.
* Warangal in Andhra Pradesh (826,000) has crossed the 0.8 million population mark. Moradabad in Uttar Pradesh (987,000), Bhubaneshwar in Odisha (967,000) and Jalandhar in Punjab (928,000) will cross the 0.9 million population mark.

The International Grains Council’s charts for all grains and major traded grains. What is the connection between these charts and local food price inflation?

The International Grains Council’s monthly Grain Market Report for 2013 October finds its grains and oilseeds index down 16% from the same period a year ago because, as the IGC has said, “the supply outlook for grains, rice and oilseeds markets is significantly more comfortable than last year”.

Recent export prices for major traded grains. Source: IGC

The IGC has raised the output forecast for total grains (wheat and coarse grains) in 2013-14 by 10 million tons this month, to 1,940 mt, up 8% from the same period last year. Demand is also expected to rise, but by a slower 5% compared to the same period a year ago. The IGC has said that “inventories are seen recovering by 39 mt to a four-year high at the end of 2013-14”.

The global trade forecast is raised by 3 mt, to 273 mt, which will exceed the previous record in 2010-11. Hence the question ought to be: if the international trade in grain collects, moves and processes just under 15% of the world’s total grain, why do prices in our local wholesale and retail food markets get influenced so much by what the IGC’s monthly report describes? This is not an answer you can expect given to you with honesty and concern from your local administration, much less from the food retail and industrial agriculture representatives.

For the major grains, here are the IGC summaries. Wheat output is expected to rise by 6% in 2013-14 from the level of a year ago and closing stocks are seen up by 7 mt, at 182mt, although this would still be below the level seen in 2011-12. The 2013-14 forecast for the global maize harvest has been raised by 5 mt this month to a record 948mt, and stocks are seen recovering to a 13-year high of 152 mt.

Rice is considered by the IGC to be “mixed, with good export demand and weather-related crop worries underpinning values in Vietnam, but Thailand’s prices fell further on limited buying interest and pressure from heavy intervention reserves”. Rice output for 2013-14 is forecast up 1% from a year ago, with world ending stocks expected to rise for a ninth consecutive year. (The IGC’s report for 2013 October is available here.)

The FAO has said: “The FAO Food Price Index rose slightly in October, averaging 205.8 points. This was 2.7 points, or 1.3% above September, but still 11 points, or 5.3% below its October 2012 value. The slight increase was largely driven by a surge in sugar prices, although prices of the other commodity groups were also up.”

The usual blue pair.

In substance, this sort of commentary for the FAO monthly food price index barely differs from the standard tedious template, in tone and tenor, that FAO has applied throughout 2013. The tone has been, as we begin to close 2013, that food prices have not moved very much through the year, and the tenor has been that food price volatility is being reined in.

Based on the evidence provided by real prices I experience in India – real markets (or bazaars or mandis) in which real vendors sell actual produce to real household buyers – I have no idea what the FAO Food Price Index is talking about. Nor do tens of millions of urban and rural households all over the world when they try and correlate the numbers of the FAO index to what they must confront every time they make a food purchase.

This is because of what the FAO Food Price Index measures which, I wearily point out, is a criticism levelled time and again. Why call it a food price index when it is in fact a food exporters’ and importers’ price indication?

Impressive equations, but where’s the connection with the local markets you and me buy our veggies from?

Perhaps. We will not know for another few months. If a change was needed that made sense to consuming households, then FAO should have ensured the index reflected what households pay for the food the buy in the markets near their homes. If the FAO must serve multiple audiences, then it must devise food price indexes for these audiences separately (but the IGC already serves the food traders, and FAO’s own Agricultural Market Information System already serves the policymakers and the major international blocs).

The concentration of wealth in India’s cities, in its biggest cities, can be seen most clearly in this set of illustrations. These colourful circles describe the imbalance between the recorded wealth in the cities and in the districts.

The data come from the Reserve Bank of India’s ‘Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks’. In attempting to find and illustrate the distribution of bank deposits between India’s banking districts (there are 652) I ran quickly into the inequality challenge: how to make sense of the enormous disparities of wealth?

Graphics provides a way out. But a word about the distribution. At the 30th percentile level in the full list, a district’s bank deposits are around Rs 1,440 crore (14.43 billion). This rises to Rs 1,930 crore for the 40th, Rs 2,540 crore for the 50th, Rs 3,420 crore for the 60th, Rs 4,650 crore for the 70th, and Rs 7,420 crore for the 80th percentiles. From there the increases are much steeper: Rs 14,000 crore for the 90th and Rs 26,000 crore for the 95th percentile.

In the first image, the relative differences between bank deposits between the 30th and 60th percentiles are illustrated – a circle corresponds to bank deposits in crore and is labelled with the state code and district name. Here we see that the difference is between about Rs 1,400 crore and Rs 3,400 crore.

In the second image, the scale has changed with two examples each from the 60th, 80th and 90th percentiles. The differences are now between about Rs 3,400 crore, Rs 7,400 crore and Rs 14,000 crore.

The third image is where the disparity becomes immediately clear: Rs 14,000 crore of deposits are dwarfed by the tenth and ninth districts of the top ten – about Rs 79,000 crore and Rs 94,000 crore. And the last image shows the vast gap within the top ten – at this scale the districts which have less than Rs 3,400 crore deposits would be mere dots, and there are close to 400 of these districts!

This helps explain the structures of power in the cities and how one of the ways India’s wealth is recorded (no black money estimates, or property valuations, or stock or futures holdings) shows the staggering extent of inequality. Yes, the top ten banking districts – all heavily urbanised metropolises – have huge populations, but any per capita division would also have to take into account business and industry deposits and the large numbers of informal sector labour – households whose capacity to save may be only marginally better than that of households in rural districts.

They sell guns and oil, and lend money at usurious rates. Their companies make rubbish electronics, pollute streams and rivers, leave toxic smears across the landscape, pay less than minimum wages to their workers, dodge labour law, bribe officials wherever they do business, write rubbish software, run third rate banks that make pawnshops look good.

They are responsible for overfishing, for mountaintop removal, for deforestation, for the GM crop and GM food that they turn into processed snacks that make us sick, to seek false cures in the vulpine hospitals they run so that their pharmaceuticals can be sold and ingested to further add to our cancerous woes. They are responsible for the insanity of over-consumption, their factories are assistants of climate change, their sales armies watch our every move, they want to buy our world though it is not for sale.

Not on this list: the many more whose personal fortunes may range from US$100 million to many billions but whose balance sheets are off limits to the maintainers of wealth indexes. Also not on this list: the thousands upon thousands of politicians great and small, in every single country and territory of the world, whose careers have in one way or another been shaped, influenced or otherwise fashioned by the ambitions of those on this list and those off it, but who have themselves amassed wealth so far beyond the civil servant’s (and public servant’s) wage as to be as good as incalculable, and who are partners with these giddy rich barons in every sordid capitalist enterprise that is dedicated to the aggrandisement of the very few at the grimy and toiling expense of the many.